The Impact of the Board Characteristics on Sustainability Performance Disclosure and Its Reflection on the Firm Value: An Applied Study on Companies Included in the S&P/EGX ESG Index

The aim of this research is to examine the impact of the board characteristics on sustainability performance disclosure and its reflection on the firm value. To achieve this objective, an applied study was conducted on a sample of (48) non-financial companies registered in the Egyptian stock market and listed in the S&P/EGX ESG Index during the period from 2015 to 2021, with a total of observations (336) observation, to test the three hypotheses of the research. The characteristics of the board size, board gender diversity, board independence, the combination of the positions of board chairman and CEO, and board activity; Sustainability scores provided by the Egyptian Stock Exchange were also used to sustainability performance disclosure, and Tobin's Q to express the firm value. Examining the impact of the board characteristics on sustainability performance disclosure and the impact of sustainability performance disclosure on the firm value was examined by relying on panel data models to analyze cross-sectional time data through the Stata program (Ver. 15). As well as examining the extent to which the board characteristics impact the firm value in the light of sustainability performance disclosure as an intermediate variable by using the path analysis model to study the direct, indirect and total effects between the variables of the assumed model through the AMOS program (Ver. 22).
The results indicate that there is a significant positive impact of the characteristics of the board gender diversity and the board independence on the disclosure of sustainability performance, while the characteristics of board size, the combination of the positions of the board chairman and CEO and board activity did not have a significant impact, and there was a significant positive effect for the disclosure of sustainability performance on the firm value, and there was a significant positive impact of the board independence on the firm value in light of sustainability performance disclosure as an intermediate variable in the conducted companies.
Based on this, the study recommends companies operating in the Egyptian business environment to increase the representation of women and independent members of the board structures, raise awareness of the importance of sustainability performance disclosure, and to oblige companies listed on the Egyptian Stock Exchange to environmental, social and governance performance disclosure along with financial reports or separately to achieve the sustainable performance, and The regulators adopting issuance an international accounting standard for the sustainability performance disclosure.